We studied the Pleistocene diversification of a relatively endemic Mediterranean insect (Ephippiger diurnus ; Orthoptera: Tettigoniidae) to understand how species with restricted range may nonetheless exhibit the complex phylogeography normally associated with broad distribution. A time-calibrated molecular phylogeny based on two mitochondrial genes showed that E. diurnus diverged into two major clades, distinguished largely be male song, before or early during the Pleistocene. Several subclades also diverged before the most recent glacial period. Data from 20 microsatellite loci indicated higher genetic diversity in populations along the Mediterranean coast in France, consistent with the hypothesis that glacial refuges were located there. ‘Isolation by distance’ accounts for much genetic differentiation between populations, but some adjacent populations are highly differentiated. A Bayesian approach defined genetically distinct clusters and assigned individuals to their most probable cluster. Clusters corresponded to clades in the phylogenetic tree, and we used cluster assignments to estimate inter-clade gene flow in areas of potential secondary contact. Gene flow is negligible in potential contact areas in the Pyrenees, but a narrow hybrid zone featuring a steep cline exists on the coast. This hybrid zone suggests that the major clades represent distinct species that diverged within a restricted area during the Pleistocene.